By Karin Hagen-Gierer, Strategic Advisory Board member, Scoutbee

In the world of procurement, 2023 promises to be a pivotal one as businesses continue to navigate the challenges brought about by the global pandemic, macroeconomic volatility, geopolitical risks, and the climate crisis. Businesses across all industries are looking for ways to build more resilient and sustainable supply networks. In doing so, procurement has a crucial role to play in identifying and capitalizing on opportunities within organizations and in the extended supply network.

Supply networks are becoming increasingly complex

One of the key challenges procurement teams are facing today is the increasing complexity of supply networks. With global supply networks spanning multiple countries and involving hundreds of different suppliers, it can be difficult to gain a clear and comprehensive view of the entire system. This complexity makes identifying potential issues and risks that could impact the supply network problematic, such as disruptions caused by natural disasters, political instability, or changes in market conditions.

Data analytics and technology can help combat disruption

A major opportunity for procurement in 2023 will be the use of data analytics and technology to identify potential disruptions in the supply network. By analyzing data on past disruptions, as well as current market trends and customer demand, procurement teams can anticipate potential challenges and take proactive measures to mitigate them. For example, they can use this information to diversify their supplier base, or to build strategic partnerships with suppliers that can provide the necessary goods and services in the event of a disruption.

Mitigate inflation, identify cost-saving opportunities

Furthermore, procurement will have the potential to use data to mitigate the impact of inflation, identify cost-saving opportunities, and improve efficiency in the supply network. By analyzing data on supplier performance, cost trends, and customer demand, procurement teams can uncover opportunities and will be better equipped to negotiate with suppliers, or to streamline their operations to reduce waste and inefficiency. This can help to reduce costs and increase profitability, while also improving the overall resilience of the supply network.

Free up time to focus on more strategic activities

In addition to using data to improve decision making, technology can also play a critical role in driving efficiency within the procurement process. For example, procurement can use automation to streamline processes and reduce the amount of time and effort required to manage them. This can free up valuable time and resources that can then be used to focus on more strategic activities, such as building long-term relationships with key suppliers.

Technology can improve collaboration in the supply network

Another key opportunity for procurement teams in 2023 is the ability to use technology to improve communication and collaboration within the supply network. By leveraging tools like project management software and collaboration platforms, procurement can work more closely with suppliers to coordinate production, manage inventory levels, and respond to changes in demand. This can help reduce the risk of disruptions and ensure that the supply network remains agile and flexible.

Sustainability and social responsibility will be priorities

Moreover, there are also several imperatives that procurement must address in order to build resilient supply networks in 2023. One of these is the need to prioritize sustainability and social responsibility within the supply network.

As consumers and regulators become increasingly focused on environmental and social issues, procurement teams need to ensure that their suppliers are operating in a responsible and sustainable manner, even in times of crisis. This can be achieved through the use of tools like sustainability reporting and supply network mapping, which can help procurement understand the environmental and social impacts of their suppliers.

Building diverse and agile supply networks is essential  

Another imperative for procurement teams in 2023 is the need to build more diverse and agile supply networks. This can be done by diversifying the pool of suppliers that procurement teams work with, as well as building relationships with suppliers in different regions and countries. This will help reduce the risk of disruptions caused by geopolitical events or natural disasters, and ensure that the supply network remains resilient in the face of uncertainty.

Overall, the opportunities and imperatives facing procurement in 2023 are clear: by leveraging data and advanced technologies, procurement teams can identify and capitalize on key opportunities, and help their companies navigate the challenges of the global supply network.

Whether it’s using data analytics to anticipate potential disruptions, the adoption of advanced technologies to improve supply network visibility, or the drive for savings and efficiency and prioritizing sustainability and diversity, procurement will play a vital role in ensuring the resilience of supply networks in the coming year.